A severe overhang of Nigerian cargoes proved slow to clear on Wednesday in lacklustre trade as arbitrage opportunities east and west were closed.
Traders said it was the worst overhang they had seen in years.
The possible return of some 650,000 barrels per day of Libyan exports in the next few weeks has also been weighing on the market, and rising gasoline margins have so far failed to pull up differentials as European refinery run cuts persist.
Weak demand coupled with official selling prices widely seen as too high for the current climate may force local Nigerian traders to default on some term loadings, several traders said, because selling the oil in the spot market could mean a loss of $2-$3 a barrel.
Traders said some 6 million barrels of July-loading West African grades were still not placed, in addition to the slow clearing of August cargoes.
Just over 30 cargoes of Nigerian crude and at least eight cargoes of Angolan oil were still available in August, one week before the emergence of the September programme. These included Dalia, Pazflor, Saturno, Plutonio, Nemba, Clov, Kissanje and Girassol.
Weak distillate cracks have been weighing on Angolan grades which have a higher yield of heavier oil products. Meanwhile, Shell still had force majeure (FM) in place at its Nigerian EA oilfield, a spokesman for the company said on Thursday. It has been in place since June 12 to repair equipment damaged by bad weather.
NIGERIA
Qua Iboe and Bonny Light was around dated Brent plus $1.20 on a fob basis, one trader said, a bit lower than recent estimates.
Ahead of the Platts window, BP offered a cargo of Brass River at dated Brent plus $2.15 a barrel on a cfr basis.
ANGOLA
BP offered two cargoes ahead of the Platts window. A cargo of Girassol at dated Brent minus $1.45 on a fob basis loading cross-month July/August and a cargo of Kissanje at dated Brent minus 50 cents a barrel on a cfr basis.
Angolan Dalia was pegged at below dated Brent minus $3.50 a barrel after a recent offer at that level failed to make a deal.
